7th Aug 2015 06:44
LONDON (Alliance News) - Superglass Holdings PLC on Friday said its return to positive earnings is set to be delayed from the second half of the current financial year thanks to a slew of changes it is making and external market issues.
Superglass said it has invested heavily in its business in June and July and has implemented its managed capital reduction strategy, which it expects to deliver operational savings and increase its focus on revenue quality. As it made the investments, the group decided to make further improvements to its operational infrastructure and, as a result, production volumes have been lower than anticipated and some other capital projects have been deferred to next year.
Superglass is also repositioning its revenue focus, with a push to partners which require more value-added products, and has implemented its increased pricing policies. However, the volume impact from its new pricing policy, which has seen it withdraw from lower margin export markets and which has resulted in some low value activity in its domestic market, means second half sales volumes will be flat on the first six months.
The group has also seen continued issues regarding the consistency of glass cullet it has been supplied and is still working with its supplier to improve the quality of the materials.
The combined impact of the issues is that Superglass no longer thinks it will post positive earnings before interest, taxation, depreciation and amortisation in the second half, though it remains confident that the changes it had made will stand it in good stead going forward.
By Sam Unsted; [email protected]; @SamUAtAlliance
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